Warning over NE business rates

The Scottish Government is facing calls to work with local councils to offset the business rate hikes

Published:15:38Wednesday 18 January 2017

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SNP ministers have been urged to set up a fund for North-east councils to provide transitional relief for businesses hit by rocketing rates.

The Scottish Conservatives warn companies in Aberdeen and Aberdeenshire are facing huge increases in non-domestic rates bills following a 2015 revaluation completed before the full impact of the downturn in the local economy affected the commercial property market.

Official government figures have shown that local publicans are facing rises in their bills of up to 259%, while oil service companies are similarly looking at increases of up to 218%.

The cumulative total for North-east firms will run to millions of pounds, prompting warnings that some businesses could go bankrupt.

Local Tory MSPs want ministers to work with councils to offset the rises.

In a joint statement they said: “These are eye-watering increases - in some cases more than 250% - and it is difficult to see how some businesses will be able to cope.

“We know that these valuations are based on 2015 figures, before the full impact of the oil downturn affected the commercial property market in the city.

“But comparisons with other parts of the UK show that Aberdeen will be hit harder than almost any other city in the country, and certainly more than anywhere else in Scotland.

“We are calling for the Scottish Government to work with Aberdeen City and Aberdeenshire councils to provide some form of transitional relief for businesses that will struggle to cover these increases.”

In a Parliamentary reply to MSP Ross Thomson, Finance Secretary Derek Mackay said: “In my Draft Budget 2017-18 announcement to Parliament I set out a comprehensive package of action in light of the revaluation to deliver a highly competitive business rates regime that will benefit businesses in the North East and across Scotland.

“The package includes expansion of the Small Business Bonus Scheme from April, 2017, to lift 100,000 properties out of rates completely, 8,000 business properties will no longer pay the Large Business Supplement and the overall business rates poundage will be cut by 3.7% to 46.6p.

“In addition, an external review led by Ken Barclay is exploring how business rates can better reflect economic conditions and support growth. We will respond quickly when the review concludes in the summer.”